Analysts are stunned by Oracle’s cloud growth projections given in the company’s first-quarter report, with many cementing the stock as an artificial intelligence frontrunner alongside the market’s biggest tech giants. Oracle on Tuesday missed Wall Street’s consensus earnings and revenue estimates but surprised the Street when it said that remaining performance obligations — a measure of contracted revenue that has not yet been recognized — jumped 359% from a year earlier to $455 billion. The company now sees $144 billion in cloud infrastructure revenue in the 2030 fiscal year, up from $10.3 billion in fiscal 2025. Chief executive Safra Catz announced that the company signed four multibillion-dollar contracts with three different customers in the quarter. Shares skyrocketed 30% in premarket trading Wednesday on the results, putting them on pace for their best day since dot-com boom of 1999. Oracle shares are up nearly 45% year to date. ORCL 1Y mountain Oracle stock performance over the past year. Several analysts got more bullish on the results and lifted their price targets on the stock, noting that this report suggests Oracle’s revenue is becoming centered around its GPU-as-a-Service business. Bank of America notably upgraded Oracle to buy and hiked its price target to $368. That signals 52.4% upside from Tuesday’s close. “Ramping capex was holding us back, since visibility on ROI for growing capex was lacking. While visibility is still limited on that front, the outlook for OCI revenue alone (51% 4-year CAGR), suggests a step function in demand,” BofA analyst Brad Sills said. Take a look at what a handful of big-name firms had to say: Bank of America: upgrades to buy from neutral, raises price target by $73 to $368 “Although profitability of AI workloads remains a key debate, it is clear that Oracle is capturing share in the large and rapidly growing market for AI infrastructure (we estimate that the AI applications industry alone will represent $155 billion by 2030). Oracle is clearly leveraging a number of advantages in its cloud software/hardware businesses to attract the largest of the AI enterprises, including OpenAI, xAI, Meta, NVIDIA and AMD). These visible reference customers should help position Oracle to capture share of AI compute,” Sills said in a note to clients. UBS: keeps buy rating, lifts price target by $80 to $360 “Oracle posted 1Q/Aug results (11% c/c revs growth, 54% cloud infra growth) that fell slightly short and set FY27 cloud infra guidance of $32b that was also short of our estimate, but in our view it won’t matter. The scale of the backlog – $455b, with $317b of deals added in 1Q/Aug alone – is so materially above Street estimates and drives such a material upward revision to FY28+ estimates that the stock deserves to re-rate materially higher, turning Oracle into perhaps the biggest large-cap growth acceleration story in all of tech,” analyst Karl Keirstead wrote in a note. “When looking at Oracle on a growth-adjusted basis we still view the stock as inexpensive.” Morgan Stanley: keeps equal weight rating, $246 price target “An extraordinary $332 billion in bookings in Oracle’s Q1 represents not only the biggest bookings number we’ve ever seen in software, but a fundamental shift in the business model towards Data Center Operator. Despite gross margin headwinds, out-year EPS targets are likely to move materially higher,” analyst Keith Weiss said. Deutsche Bank: maintains buy rating, $335 price target “In our near 20 years covering Oracle and for that matter the entire Software industry, there are few quarterly results that match F1Q both in terms of magnitude of revision and clarity of the moment. With RPO +359% y/y well exceeding a super lofty expectation for doubling, Oracle has underscored its position as the leader in AI infrastructure underpinned by several key advantages that stem from its deep technology roots and know-how in parallel computing,” analyst Brad Zelnick wrote in a note. “With many prognosticating the death of SaaS software with the possibility of large incumbents being supplanted by AI-native disruptors, we believe it’s actually Oracle’s underlying infrastructure that can enable apps success in the new AI paradigm.” Barclays: reiterates overweight rating, $281 price target “Oracle as a business is significantly changing with these contracts and hence, shares will likely trade higher. Initial indications about these large contracts and management commentary confirm that long-term revenue assumptions ($104bn in FY29, given last October) are too low as Oracle’s infrastructure business alone is now expected to deliver $114bn in FY29,” analyst Raimo Lenschow said in a Tuesday note. “We think investors will ignore that Oracle’s Q1 was more mixed as the long-term changes are more important.” Guggenheim: reiterates buy rating, hikes price target to $375 from $250 “Oracle’s F1Q26 results give a peek into a future that we haven’t seen in over 25 years covering the Software sector. Oracle has always been a technology company first, even when growth dropped to single digits, honing its craft around its technology-leading database but also expanding well beyond this. … But is this sustainable? If Oracle could come from a 4th mover advantage, couldn’t a 5th mover see similar benefits? Perhaps. But Oracle didn’t start from scratch and keep in mind, Oracle came out with RAC 25 years ago, which means its original patents have expired – and no one has come up with an answer to it even today. We think this is sustainable, as we move from AI Training, to AI Inferencing, to more Traditional Cloud workloads, and nontraditional Sovereign Clouds, Dedicated Regions, Cloud at Customer, and finally Oracle Database Multi-Cloud.” Stifel: keeps buy rating, increases target to $350 from $250 To call it a blow-out quarter would be somewhat unfair to Oracle as 359% RPO growth driven by mega contracts with multiple LLM vendors, a sizable uptick in out-year OCI growth rates and management’s commentary around accelerating operating income growth targets which helps to reduce concerns around gross margin compression stemming from the growing capex bill sent the stock +~25% afterhours. With respect to Capex, the company once again raised its FY26 target to ~$35B based on the dramatic uptick in RPO. Given the current backlog, and management commentary that RPO is likely to surpass $500B in coming quarters, we expect the Capex spending to continue to grow at a very healthy clip.
Stunned analysts ratchet up targets on Oracle, Bank of America upgrades. Full Wall Street reaction
